Lonely Planet

While WiFi might be considered to take off in the future it might actually end off in a local environment, providing only internet connection within official buildings, companies, campuses or private houses.

Ever increasing oil prices and economic growth slowdown in 2005 made companies very cautious about new technologies like WiFi and VoIP and their applicability to make money. While those, having not invested heavily in 3G in the past were looking optimistically forward to the new opportunities created by VoIP or WiFi, those who invested were reluctant to invest again in another technology that seems not even comparable attractive like 3G. Having those licenses already and feeling the threat to amortize their costs they were pushing forward to improved standards like 3.5G or 4G which were introduced in 2006 and 2007 respectively. Those who invested into offering VoIP phones in 2004 were facing losses by the end of 2007 as people were reluctant to adopt the new devices. Besides people calling frequently between countries or spending hours on the phone, private people are slow at adopting Internet-telephony. Although the commercialization of WiFi seemed to be very attractive because of missing licensing cost, the competition from internet telephony via fixed lines used by those users really needing low cost calls, became an obstacle. Wireless devices using WiFi standards were finally introduced at the end of 2005, followed by a commercialization wave of internet-telephony over WiFi, but besides an initial interest, the wished growth did not take place. This rejection was not only due to a low popularity of the internet-popularity. Basically the bad connectivity that is caused by a missing coverage of WiFi hotspots and lost calls when moving between hotspots was an affront to those people who dared to adopt the new technology nevertheless. Besides that, companies were also very concerned about security issues and additionally wanted to replace business traveling through video conferencing. Due to the low bandwidth and worse coverage, they were still relying on cables till the introduction of the improved 3.5G standards. With the introduction in mid 2006 and increasing viability of telephony, improved delivery of bandwidth for broadband as well as video-conferencing and better connectivity of wireless internet cards due to higher coverage of services, Telcos finally divested from WiFi telephony at the end of 2006.
At the end of 2005 till 2006 a parallel market development was increasing the pressure on WiFi’s success. In late 2004 mobile devices’ companies as well as customers suffered from multi-function devices that ran out of battery within 1 day and were becoming increasingly heavy and big again by ironically promoting the idea of the perfect flexibility. Learning from those experiences, developments continued to deliver better battery performance and higher quality, which lead from the de-installation of unnecessary services on mobile devices to a development back to single-functional devices and a more fragmented media environment. With WiFi connectivity being very battery consuming and not delivering the wished quality of communication, WiFi handhelds as well as WiFi services were soon regarded as outdated in performance.
In mid 2006 the first WiMax network was introduced in Japan with considerable success till early/ mid 2007, raising the attention of foreign telecommunication companies. WiMax enabled wireless communication with each hotspot covering an area of 30 miles, and achieving data rates of up to 75Mbps. By the end of 2007, following a recovering period in 2006, the economy was getting better, enabling companies to loosen their tight investment budgets. While still heavily investing in the improved 4G developments, companies were considering adopting the WiMax standard. With this competitive pressure, WiFi is made a second choice technology, only used by the already existing open-source networks not able to deliver higher bandwidth for uploading and downloading activities for a wide community of users.
With the introduction of 4G in Europe in 2008 after a successful trial period in Japan in early 2007, high marketing budgets and WiMax still in the baby shoes, 4G could take off, finally delivering the broadband connectivity that were already promoted in 2000 with the first UMTS license bought. 2008 to 2009 became a competitive year were 4G and WiMax were marking their territories, with 4G becoming the standard on the move, while WiMax was solving last mile problems with high quality and high performance solutions. With developments going on in 2009 and the introduction of new multi-function devices due to a breakthrough of battery technology already dated back in 2006 and an increased demand for the improved mobile broadband service, the devices developed were becoming more flexible again. With the increasing media integration, WiFi lacking necessary investments over the last years and new technology developments going on, WiFi has nearly vanished from the market in 2010, remaining the image of a bridge technology and remaining a nostalgic like hobby for the first foundations and cities that adopted WiFi Internet connections and hotspots.